I purchased a property in 1998 for £156,000 and lived in that property as my main residence until 2007. I moved into a new property purchased with my partner (now wife) and, after three years, had to nominate this as my main residence. At some point soon, I will want to sell my original property (purchased in my sole name), but I want to work out how to pay the least amount of (or no) capital gains. I have heard selling my property to my wife is a way of reducing the largest gain (from 2007 to the present day) if we plan to sell it in the next couple of years. Is that a viable option, or what would you recommend?  

Arthur Weller replies:  

Assuming your wife has a similar income in the tax year as you, if you transfer your property to your wife, you will be no better off than you are now. According to rules introduced from April 2020 (see www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64925), she will be entitled to the same capital gains tax (CGT) principal private residence relief as you. However, if you transfer (say) half the house to her, then when the property is sold to a third party, both of you will have a CGT annual exemption to use against the taxable gain, so overall the taxable gain will be less. If you don't have similar incomes to each other, it is difficult to answer the question properly without this information.